SEC Comment Letter for MORGAN STANLEY (MS, MS-PA, MS-PE, MS-PF, MS-PI, MS-PK, MS-PL, MS-PO, MS-PP, MS-PQ) (CIK 0000895421) (MS) — Dec 21, 2010
MORGAN STANLEY (MS, MS-PA, MS-PE, MS-PF, MS-PI, MS-PK, MS-PL, MS-PO, MS-PP, MS-PQ) (CIK 0000895421)
Date: Dec. 21, 2010 · CIK: 0000895421 · Accession: 0000000000-10-076503
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-11758
Letter
December 21, 2010 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036
Re: Morgan Stanley Form 10-Q for Quarterly Period Ended September 30, 2010 Filed November 8, 2010 File No. 001-11758
Dear Ms. Porat: We have reviewed your filing and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advi sing us when you will provide the requested response. If you do not believe our comments apply to your fact s and circumstances or do not believe an amendment is appropriate, pl ease tell us why in your response. After reviewing any amendment to your filing and the information you provide in response to these comments, we ma y have additional comments.
Ruth Porat Morgan Stanley December 21, 2010 Page 2
Form 10-Q for the quarterly period ended September 30, 2010
Financial Statements
Notes to Condensed Consolidated Financial Statements
11. Commitments, Guarantees and Contingencies
Other Guarantees and Indemnities
Representation and Warranties on Cert ain Securitized Assets, page 67
1. Please tell us and disclose the total am ount you have paid to date related to representations and warranties in connection w ith securitized assets. In addition, explain to us how you determined that the probability of any future payments related to these representations and warranties is remote. Contingencies, page 68
2. We note your disclosure in the last paragra ph of footnote 11. Please tell us how this disclosure complies with ASC 450-20-50. Furt her, to the extent the basis for this disclosure is paragraph 4 of ASC 450-20-50, please tell us how you have complied with paragraph 4b of ASC 450-20-50, or tell us why you believe it was not necessary to make an explicit statement that an estimate of the possible loss cannot be made. Item 2. Management’s Discussion and Analys is of Financial Condition and Results of Operations Liquidity and Capital Resources
The Balance Sheet, page 118
3. We note the Tier 1 common ratio increased from 8.2% at December 31, 2009 to 10.7% at September 30, 2010 as you have disclosed on page 119. Additionally, we note the Total Capital (to RWAs) and Tier 1 Capital (to RW As) for Morgan Stanley Private Bank, N.A. decreased from 70.3% at December 31, 2009 to 26.9% at September 30, 2010 as you have disclosed on page 71. Please tell us th e reasons for the changes in these ratios from period to period and the impact that these cha nges have had or are expected to have on the company’s operations. Consider enhanci ng your disclosure in future filings to include this discussion.
Ruth Porat Morgan Stanley December 21, 2010 Page 3
Credit Ratings, page 125
4. It appears that Fitch Ratings downgraded Mo rgan Stanley Bank, N.A. from A+ at June 30, 2010 to A at September 30, 2010. Please tell us the impact that this downgrade has had or is expected to have on the comp any’s operations. Consider enhancing your disclosure in future filings to include this discussion. We urge all persons who are responsible for th e accuracy and adequacy of the disclosure in the filing to be certain that the filing include s the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules requir e. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In responding to our comments, please provi de a written statement from the company acknowledging that: • the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States.
You may contact Jennifer Moni ck, Senior Staff Accountan t, at 202-551-3295 or me at 202-551-3438 if you have questions.
Sincerely,
Robert Telewicz Senior Staff Accountant
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December 21, 2010 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036 Re: Morgan Stanley Form 10-Q for Quarterly Period Ended September 30, 2010 Filed November 8, 2010 File No. 001-11758 Dear Ms. Porat: We have reviewed your filing and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advi sing us when you will provide the requested response. If you do not believe our comments apply to your fact s and circumstances or do not believe an amendment is appropriate, pl ease tell us why in your response. After reviewing any amendment to your filing and the information you provide in response to these comments, we ma y have additional comments. Ruth Porat Morgan Stanley December 21, 2010 Page 2 Form 10-Q for the quarterly period ended September 30, 2010 Financial Statements Notes to Condensed Consolidated Financial Statements 11. Commitments, Guarantees and Contingencies Other Guarantees and Indemnities Representation and Warranties on Cert ain Securitized Assets, page 67 1. Please tell us and disclose the total am ount you have paid to date related to representations and warranties in connection w ith securitized assets. In addition, explain to us how you determined that the probability of any future payments related to these representations and warranties is remote. Contingencies, page 68 2. We note your disclosure in the last paragra ph of footnote 11. Please tell us how this disclosure complies with ASC 450-20-50. Furt her, to the extent the basis for this disclosure is paragraph 4 of ASC 450-20-50, please tell us how you have complied with paragraph 4b of ASC 450-20-50, or tell us why you believe it was not necessary to make an explicit statement that an estimate of the possible loss cannot be made. Item 2. Management’s Discussion and Analys is of Financial Condition and Results of Operations Liquidity and Capital Resources The Balance Sheet, page 118 3. We note the Tier 1 common ratio increased from 8.2% at December 31, 2009 to 10.7% at September 30, 2010 as you have disclosed on page 119. Additionally, we note the Total Capital (to RWAs) and Tier 1 Capital (to RW As) for Morgan Stanley Private Bank, N.A. decreased from 70.3% at December 31, 2009 to 26.9% at September 30, 2010 as you have disclosed on page 71. Please tell us th e reasons for the changes in these ratios from period to period and the impact that these cha nges have had or are expected to have on the company’s operations. Consider enhanci ng your disclosure in future filings to include this discussion. Ruth Porat Morgan Stanley December 21, 2010 Page 3 Credit Ratings, page 125 4. It appears that Fitch Ratings downgraded Mo rgan Stanley Bank, N.A. from A+ at June 30, 2010 to A at September 30, 2010. Please tell us the impact that this downgrade has had or is expected to have on the comp any’s operations. Consider enhancing your disclosure in future filings to include this discussion. We urge all persons who are responsible for th e accuracy and adequacy of the disclosure in the filing to be certain that the filing include s the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules requir e. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In responding to our comments, please provi de a written statement from the company acknowledging that: • the company is responsible for the adequacy an d accuracy of the disclo sure in the filing; • staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and • the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States. You may contact Jennifer Moni ck, Senior Staff Accountan t, at 202-551-3295 or me at 202-551-3438 if you have questions. Sincerely, Robert Telewicz Senior Staff Accountant